07/08/2008 05:12 am ET Updated May 25, 2011

What The Heck Is A Carbon Credit? Ask Umbra

Q. Dear Umbra,

I don't understand carbon credits and how people can buy/sell/trade them. How is this good for our environment?

Columbus, Ohio

A. Dearest Elizabeth,

I believe you speak of the carbon credit, rather than the carbon offset? The carbon offset is a consumer product that you or I could buy, enabling us to mildly compensate for our greenhouse-gas emissions by supporting renewable-energy projects. You know, "I'm sorry I'm repeatedly choosing to break your leg, let me apologize by funding medical training in Zimbabwe." The carbon credit, on the other hand, is an aspect of the industrial "cap-and-trade" program and works slightly differently than the offset. I'll tackle carbon credits today; if you find yourself thinking, "Dang that Umbra, I really wanted to know about personal carbon offsets," write again or visit my old column on that topic.

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